Mumbai city news: Businesses shut early on Friday to bring in new tax regime; traders wait for clarity on how exactly single-tax system will work

The Central Excise Office, now renamed GST Bhavan, is lit up ahead of the midnight rollout of the new tax regime.(Bhushan Koyande)

As the final hours ticked by before the national rollout of the Goods and Services Tax (GST) on Friday, businesses and establishments across the city readied for change.

Restaurant owners were particularly anxious.

“Most customers are confused about restaurant taxes,” says Aditya Agrawal, owner of AKA Bistro at Kala Ghoda, referring to bills that until today included a service tax, value-added tax (VAT), educational cess and Swachh Bharat cess. “We expect confusion to increase further with GST,” he added.

Pramod Thakur/HT
(Toto’s Garage , a Bandra-based restaurant and pub, opened at midnight after GST was announced.)

Like many restaurants, the bistro shut early on Friday night – at 10.30pm instead of the usual midnight — so their payment systems could be updated to reflect the new tax. Diners will have to pay more.

A meal at AKA Bistro that cost Rs1,000 with taxes before GST will now cost Rs1,160.

The restaurant has also been in talks with food suppliers for weeks to get their GST codes and upgrade their transaction processes. “We will have fewer cash transactions with vegetable and fruit vendors now,” says Agrawal. “All the buying will be done through bank accounts and invoices.”Agrawal has trained his staff to handle customers’ queries. The most common question he expects is: “Why don’t you reduce prices?”

Families take advantage of the midnight discount offered by supermarkets to stock up on groceries.
(Praful Gangurde)

Supermarkets are on standby too. Big Bazaar’s sale – from midnight to 2am on July 1 – offered discounts and deals on groceries and staples, though helpline executives were unsure about which items would be cheaper or more expensive the following day. It didn’t stop Vikhroli businessman Kaushal Jain, 26, from deciding to shop at midnight. “I plan to stock up either way.”

E-commerce companies are especially optimistic. “We expect a lot more orders after GST,” says Bhuman Dani, co-founder of The Good Life Company, an online luxury tea brand. “Portals will be able to deliver faster with only one common tax to pay.” He expects a 10% to 15% rise in customers from July.

Online retailer Amazon India has been preparing for weeks. The company organised 16 GST support centres in 11 cities to help sellers understand implications of GST for merchants and pricing.

“We helped them understand procedural formalities and addressed GST queries,” says Gopal Pillai, director and general manager of seller services. In Delhi, Mumbai and Bengaluru, CAs have been roped in to address sellers’ queries.

The furniture industry, however, is in some confusion. “GST does not specify anything about metal furniture, so there will be confusion,” says Ashish Gupta, director of furniture company InLiving. He expects prices to rise by 15%, meaning “low sales for around a month and many questions from customers”.